International Ops 2017

Flight Service Bureau | OPSGROUP

Month: December 2016

The Hidden Costs of Operating to China

China has always been challenging to operate to. Handling rates are prohibitively expensive, half the country’s airways are closed to foreign operators, and slots and parking at the major airports can often be impossible to obtain.

But often the most frustrating thing about operating to China is just trying to work out what all the different charges are for. If you receive a big bill post-flight from a company called Tong Da Air Service, unfortunately it’s not a scam! These guys are the government-appointed agency in China who are responsible for collecting all the NAV fees for flights by foreign operators.

 

It’s important to know in advance what you will get charged here, as it’s not totally clear  without doing a bit of digging – and your handling agent will likely not include all these complicated fees when they provide you with handling quotes!

So when it comes to NAV fees in China, you will always get charged for four separate things:

  • En-Route Charge.
  • Terminal Navigation Charge.
  • Compensation Charge (the fee paid to the government for the permit)
  • Service Charge (Tongda Air’s charge for obtaining the permit)

 

Importantly…

En-Route Charge = this is charged for each individual flight

Terminal Navigation / Service Charge / Compensation Charge = these are charged per permit, and are always set costs.

 

So let’s say you fly RKSS-ZBAA-RKSS: you will need to pay En-Route Charges for each sector, and one set of Terminal Navigation / Service / Compensation charges.

Similarly, if your routing involves multiple domestic flights within China, (eg. RKSS-ZBAA-ZBTJ-ZSPD-RKSS) you only need one permit to cover all those stops,  which means you will only pay one set of Terminal Navigation / Service / Compensation charges. So far so good…

 

But let’s say you fly something like RKSS-ZBAA-VHHH-ZGSD: on this routing you will effectively be departing China when you go to VHHH, so you will need two permits – one for each stop in China (ZBAA and ZGSD). And because of this, you would need to pay two sets of Terminal Navigation / Service / Compensation charges!

 

china-map

 

So here’s how you work out the 4 charges:

 

1. En-Route Charge

There’s a very lengthy and complicated method of working this out, but the easiest thing to do is just use your flight-planning tool to tell you the answer. Most tools have this function – just make sure you click the button that says something like ‘overflight costs’ and find the section on the output of the flight plan that looks something like this:

screen-shot-2016-11-08-at-13-34-35

(Showing costs for a B737 operating from ZBAA/Beijing to VHHH/Hong Kong)

 

2. Terminal Navigation Charge

MTOW                      Charges (RMB Yuan)

Up to 25                    990

26-50                         1060

51-100                      1060 + 21*(T-50)

101-200                   1920 + 23*(T-100)

above 201               3820 + 27*(T-200)

 

T = the actual MTOW rounded up to the nearest tonne

 

So for example:

an aircraft with a MTOW of 60T = 1060 + 21*(60-50) = 1270RMB

an aircraft with a MTOW of 110T = 1920 + 23*(110-100) = 2150RMB

an aircraft with a MTOW of 210T = 3820 + 27*(210-200) = 4090RMB

 

3. Compensation Charge

This will always be $3000.

 

4. Service Charge:

This will be either $1200 for landing permit, or $500 for overflight permit.

 

New Dangerous Goods regulations from Jan 1st

You can view the full list of changes here, but this list might be a little handier. From Jan 1st, the new edition of the IATA Dangerous Goods Regulations (Edition 58) will be applicable.

  • Replacing the existing lithium battery handling label with a new multi-modal lithium battery mark to be phased in over two years, with a deadline of December 2018 (Figure 7.1.C)
  • Introducing a new Class 9 dangerous goods label specifically for lithium batteries, to be phased in over two years, with a deadline of December 2018 (Figure 7.3.X)
  • Many new and modified special provisions
  • Allowing shippers to assign a substance to a class or division different to that shown in the List of Dangerous Goods (IATA DGR 4.2), subject to approval by the appropriate national authority
  • Adding classification criteria for polymerizing substances into Division 4.1
  • Adding new UN numbers and Proper Shipping Names for “polymerizing substances,
  • liquid and solid, stabilized” (PI 459) and “polymerizing substances, liquid and solid requiring temperature
  • Updating Special Provision A104 for UN1230, Methanol that requires all packages containing methanol to bear a Division 6.1 toxic hazard label (in addition to the Class 3 flammable label)
  • Changing the documentation requirements for hazmat air shipments

Reference:

IATA DGR Changes from 1st Jan, 2017.

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